Bill would give tax credits to investors

 

DOVER — Legislation filed last week would create a tax credit for individuals who invest in Delaware-based small businesses. Supporters say the measure, known as the Angel Investor Job Creation and Innovation Act, could drive entrepreneurship and create jobs.

House Bill 170 would allow the state to designate certain small businesses in science and technology fields as eligible to receive funding that would then trigger a tax break for the investor. Investors would have to apply to qualify for the credit.

The tax credit would cover 25 percent of the investment, up to $250,000 for couples or $125,000 for individuals. It would max out at $5 million per year.

The term angel investor refers to someone who puts up his or her own money for a company, with the expectation of profiting down the road if the business booms.

While the proposal could lower state revenue by up to $5 million, backers say it would pay off in the long run.

“If we in the state are serious about fostering economic development in Delaware, and I believe we are, then the Angel Investor Job Creation and Innovation Act must take effect sooner rather than later,” main sponsor Rep. Michael Ramone, R-Pike Creek Valley, said in a statement. “The funding that would be available through this legislation is critical in helping scientific or technology small businesses get off the ground and begin operating. This will be the second time we have tried to enact such a measure. I introduced a similar bill last year and I am hopeful, that with the governor’s support this year, we can enact this important bill.”

The legislation has bipartisan support and is backed by Gov. John Carney, who has advocated for an economy driven more by entrepreneurship and innovation than by big business.

“We should do everything we can to support Delaware’s innovators and entrepreneurs who are leading Delaware’s new economy,” the governor, a Democrat, said in a statement. “This legislation would encourage investments in innovative, Delaware-based small businesses and connect our most talented entrepreneurs with the resources they need to be successful. Thank you to all the members of the General Assembly who are leading this important initiative.”

Reach staff writer Matt Bittle at mbittle@newszap.com

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